[Congressional Bills 103th Congress]
[From the U.S. Government Printing Office]
[H.R. 5308 Introduced in House (IH)]
103d CONGRESS
2d Session
H. R. 5308
To amend title II of the Social Security Act to provide for a
limitation on payment during any year of old-age, wife's, and husband's
insurance benefits, based on the work record of an individual with
higher levels of income for such year, if total payments of such
benefits have exceeded prior contributions plus interest, and to adjust
the gradual increase in retirement age so as to commence with calendar
year 1996 and to reach age 68 for those who would attain age 65 in or
after calendar year 2031.
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IN THE HOUSE OF REPRESENTATIVES
November 29, 1994
Mr. Smith of Michigan introduced the following bill; which was referred
to the Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend title II of the Social Security Act to provide for a
limitation on payment during any year of old-age, wife's, and husband's
insurance benefits, based on the work record of an individual with
higher levels of income for such year, if total payments of such
benefits have exceeded prior contributions plus interest, and to adjust
the gradual increase in retirement age so as to commence with calendar
year 1996 and to reach age 68 for those who would attain age 65 in or
after calendar year 2031.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Social Security Payment Equity Act
of 1994''.
SEC. 2. LIMITATION ON PAYMENT OF CERTAIN BENEFITS IN EXCESS OF
CONTRIBUTIONS DURING YEARS OF HIGHER INCOME.
(a) In General.--Section 202 of the Social Security Act (42 U.S.C.
402) is amended by adding at the end the following new subsection:
``Limitation on Payment of Certain Benefits in Excess of Contributions
During Years of Higher Income
``(y)(1) Notwithstanding any other provision of this title, if,
with respect to any year of higher income for an individual--
``(A) the total amount of the adjusted values of all
benefits under subsections (a), (b), and (c) paid in months
prior to such year based on the wages and self-employment
income of such individual exceed
``(B) the total amount of the adjusted values of all OASDI
taxes paid with respect to the wages and self-employment income
of such individual, determined as of the beginning of such year
of higher income,
then the monthly benefits under subsections (a), (b), and (c) based on
the wages and self-employment income of such individual paid for any
month in such year shall be reduced (after all other deductions and
reductions applicable under this title) by the percentage reduction
specified under paragraph (2). Benefits, as reduced under this
paragraph, if not a multiple of $1, shall be increased to the next
higher multiple of $1.
``(2)(A) In the case of an individual who is not married as of the
beginning of such individual's taxable year, the percentage reduction
is the percentage specified in the following table:
``If such individual's adjusted The percentage is:
gross income for the
taxable year is:
Over $50,000 but not over $52,000............. 10 percent.
Over $52,000 but not over $54,000............. 20 percent.
Over $54,000 but not over $56,000............. 30 percent.
Over $56,000 but not over $58,000............. 40 percent.
Over $58,000 but not over $60,000............. 50 percent.
Over $60,000 but not over $62,000............. 60 percent.
Over $62,000 but not over $64,000............. 70 percent.
Over $64,000 but not over $66,000............. 80 percent.
Over $66,000 but not over $68,000............. 90 percent.
Over $68,000.................................. 100 percent.
``(B) In the case of an individual who is married as of the
beginning of such individual's taxable year, the percentage reduction
is the percentage specified in the following table:
``If the total adjusted gross The percentage is:
income of such individual
and such individual's
spouse for the taxable year
is:
Over $100,000 but not over $104,000........... 10 percent.
Over $104,000 but not over $108,000........... 20 percent.
Over $108,000 but not over $112,000........... 30 percent.
Over $112,000 but not over $116,000........... 40 percent.
Over $116,000 but not over $120,000........... 50 percent.
Over $120,000 but not over $124,000........... 60 percent.
Over $124,000 but not over $128,000........... 70 percent.
Over $128,000 but not over $132,000........... 80 percent.
Over $132,000 but not over $136,000........... 90 percent.
Over $136,000................................. 100 percent.
``(3) For purposes of this subsection:
``(A) The term `year of higher income' for an individual
means any taxable year--
``(I) if, in the case of an individual who is not
married as of the beginning of such taxable year, the
adjusted gross income of such individual for such
taxable year exceeds $50,000, or
``(II) if, in the case of an individual who is
married as of the beginning of such taxable year, the
total adjusted gross income of such individual and such
individual's spouse for such taxable year exceeds
$100,000.
``(B) The term `adjusted gross income' has the meaning
provided in section 62 of the Internal Revenue Code of 1986.
``(C) The term `adjusted value' of an amount means such
amount, plus interest on such amount computed at a rate equal
to 2 percent, compounded annually.
``(D) The term `OASDI taxes' means the taxes imposed under
sections 1401(a), 3101(a), and 3111(a) of the Internal Revenue
Code of 1986.
``(4) The Commissioner of Social Security shall provide by
regulation for the maintenance of such records, relating to individuals
on the basis of whose wages and self-employment income benefits under
subsection (a), (b), and (c) are otherwise payable under this section,
of total benefits paid and OASDI taxes paid, as is necessary to
preclude, to the maximum extent practicable, overpayments and
underpayments of benefits resulting from the operation of this
subsection. The Commissioner and the Secretary of the Treasury shall
enter into such arrangements as are necessary to ensure that such
records maintained by the Commissioner are currently accurate at all
times.
``(5)(A) In any case in which a taxable year of an individual is a
year of higher income for such individual, if a benefit under
subsection (a), (b), or (c) has been paid for any month in such year on
the basis of such individual's wages and self-employment income, such
individual (or the individual who is in receipt of such benefit on his
behalf) shall make a report to the Commissioner of Social Security of
his adjusted gross income, and (if he is married) the adjusted gross
income of his spouse, for such taxable year. Such report shall be made
on or before the fifteenth day of the fourth month following the close
of such year, and shall contain such information and be made in such
manner as the Commissioner may by regulations prescribe. The
Commissioner may grant a reasonable extension of time for making such
report if he finds that there is valid reason for a delay, but in no
case may the period be extended more than three months.
``(B) If an individual fails to make a report required under
subparagraph (A), within the time prescribed by or in accordance with
such subparagraph, for any taxable year and a benefit based on such
individual's wages and self-employment income is paid for any month in
such taxable year or the next following taxable year which is in excess
of the amount payable by reason of this subsection, he shall be deemed
to have been overpaid for such month an additional amount as follows:
``(i) in the case of the first such month for which a
benefit is paid in excess of the amount payable by reason of
this subsection, the additional amount shall be equal to the
amount of such excess;
``(ii) in the case of the second such month for which a
benefit is paid in excess of the amount payable by reason of
this subsection, the additional amount shall be equal to two
times the amount of such excess; and
``(iii) in the case of the third or a subsequent such month
for which a benefit is paid in excess of the amount payable by
reason of this subsection, the additional amount shall be equal
to three times the amount of such excess;
except that additional amounts of overpayment determined under this
paragraph shall be determined only for months for which the benefit in
excess of the amount payable was received and accepted.
``(C)(i)(I) If the Commissioner of Social Security determines, on
the basis of information obtained by or submitted to him, that it may
reasonably be expected that benefits under subsection (a), (b), or (c)
based on an individual's wages and self-employment income will not be
payable (in whole or in part) for any month in a taxable year of such
individual by reason of this subsection, the Commissioner may, before
the close of such taxable year, suspend the payment (in whole or in
part) for each month in such year (or for only such months as the
Commissioner may specify) of such benefits. Such suspension shall
remain in effect with respect to the benefits for any month until the
Commissioner has determined the extent to which benefits are payable
under this subsection.
``(II) The Commissioner of Social Security may, before the close of
the taxable year of an individual on whose wages and self-employment
income benefits are otherwise payable during such year, request of such
individual that he make, at such time or times as the Commissioner may
specify, a declaration of his estimated adjusted gross income (or the
estimated total adjusted gross income for him and his spouse) for the
taxable year and that he furnish to the Commissioner such other
information with respect to such income as the Commissioner may
specify. A failure by such individual to comply with any such request
shall in itself constitute justification for a determination under
subclause (I) that it may reasonably be expected that such benefits are
not payable (in whole or in part) by reason of this subsection.
``(III) If the payment of benefits under subsection (a), (b), or
(c) based on the wages and self-employment income of an individual have
been suspended (in whole or in part) for all months in any taxable year
of such individual under subclause (I), no payment of such unpaid
benefits shall be made for any such month in such taxable year after
the expiration of the period of three years, three months, and fifteen
days following the close of such taxable year unless within such period
the individual, or some other person entitled to benefits under this
title on the basis of the same wages and self-employment income, files
with the Commissioner of Social Security information showing that the
unpaid portion of a benefit for such month is payable to such
individual.
``(ii) If, after the close of a taxable year of an individual on
whose wages and self-employment income benefits under subsection (a),
(b), or (c) were otherwise payable for months in such year, the
Commissioner of Social Security requests such individual to furnish a
report of his adjusted gross income (or the total adjusted gross income
of him and his spouse) for such taxable year or any other information
with respect to such income which the Commissioner may specify, and the
individual fails to comply with such request, such failure shall in
itself constitute justification for a determination that such benefits
were not payable (in whole or in part) for each month in such taxable
year (or only for such months thereof as the Commissioner may specify)
by reason of this subsection.
``(D) The Commissioner of Social Security shall develop and
implement procedures in accordance with this paragraph to avoid paying
more than the correct amount of benefits under subsection (a), (b), or
(c) as a result of the failure of the individual on whose wages and
self-employment income such benefits are based to file a correct report
or estimate of adjusted gross income. Such procedures may include
identifying categories of individuals on the basis of whose wages and
self-employment income benefits which are not payable (in whole or in
part) under this subsection are likely to be paid and requesting that
they estimate their adjusted gross income (or the total adjusted gross
income of them and their spouses) more frequently than other persons
subject to this subsection.
``(6) Benefits which would, but for the provisions of paragraph
(1), be payable under this title, on the basis of the wages and self-
employment income of the individual referred to in paragraph (1), to
any other individual (other than the individuals to whom benefits based
on such wages and self-employment income are not payable by reason of
paragraph (1)) shall be payable as though such individuals were
receiving such benefits.''.
(b) Effective Date.--The amendments made by this section shall
apply with respect to benefits otherwise payable in taxable years
ending after December 31, 1995.
SEC. 3. INFORMATION RELATING TO BENEFIT LIMITATIONS PROVIDED IN SOCIAL
SECURITY ACCOUNT STATEMENTS.
(a) In General.--Section 1143 of the Social Security Act (42 U.S.C.
1320b-13) is amended--
(1) in the heading for subsection (a), by striking ``Upon
Request'' and inserting ``of Annual Statements'';
(2) in subsection (a)(1), by striking ``Beginning'' and all
that follows and inserting the following: ``Not later than
October 1 of each year, the Commissioner of Social Security
shall provide an annual social security account statement
(hereinafter in this section referred to as the `statement') to
each eligible individual for whom a mailing address can be
determined through such methods as the Commissioner determines
to be appropriate.'';
(3) in subsection (a)(2)(A), by striking ``at the date of
the request'';
(4) in subsection (a)(2)(B), by striking ``on the date of
the request'';
(5) in subsection (a)(2)(C), by striking ``on the date of
the request'' and by striking ``and'' at the end;
(6) in subsection (a)(2)(D), by inserting ``in the case of
individuals not receiving benefits,'' after ``(D)'', and by
striking ``title XVIII.'' and inserting ``title XVIII; and'';
(7) by adding after subparagraph (D) the following:
``(E) a table setting forth an estimate, in relation to
1980 and every 10th year thereafter through 2030, of the
following information:
``(i) the total amount of the adjusted values of
all employee, employer, and self-employment
contributions made with respect to the wages and self-
employment income of the average earner retiring at
retirement age in each such year;
``(ii) the total amount of the adjusted values of
the monthly benefits paid under subsections (a), (b),
and (c) of section 202, as of the date of the
statement, on the basis of the wages and self-
employment income of the average earner retiring at
retirement age in each such year; and
``(iii) the total amount of the adjusted values of
the monthly benefits which will have been paid under
such subsections, as of the time of the death of the
average earner retiring at retirement age in each such
year, on the basis of his or her wages and self-
employment income, determined under generally accepted
actuarial assumptions.
For purposes of subparagraph (E), the term `adjusted value' of
an amount means such amount, plus interest on such amount
computed at a rate equal to 2 percent, compounded annually.'';
(8) by striking subsection (b);
(9) in subsection (c)--
(A) by striking the heading and inserting the
following:
``Required Estimates of Benefits'';
(B) by striking ``(c)(1) By not later'' and all
that follows through ``With respect to'' in paragraph
(2) and inserting ``(b) With respect to''; and
(C) by adding at the end the following new
sentence: ``The Commissioner shall provide such
estimates of retirement benefit amounts to eligible
individuals who have not attained age 50 upon
request.''; and
(10) by adding at the end the following new subsection:
``Inclusion of Statements to Retirees with Other Mailings
``(c) The Commissioner of Social Security shall ensure that
statements provided to eligible individuals who are receiving benefits
under title II are included to the maximum extent practicable with
mailings otherwise made to such individuals. The Commissioner shall
consult with the Secretary of the Treasury in carrying out the
requirement of this subsection and such Secretary shall provide such
appropriate assistance to the Commissioner as is necessary to carry out
such requirements.''.
(b) Effective Date.--The amendments made by subsection (a) shall
apply with respect to statements provided on or after October 1, 1995.
SEC. 4. GRADUAL INCREASE IN RETIREMENT AGE COMMENCING WITH CALENDAR
YEAR 1996 AND REACHING AGE 68 FOR THOSE ATTAINING AGE 65
IN OR AFTER CALENDAR YEAR 2031.
(a) In General.--Section 216(l)(1) of the Social Security Act (42
U.S.C. 416(l)(1)) is amended by striking subparagraphs (A) through (E)
and inserting the following:
``(A) with respect to an individual who attains early
retirement age (as defined in paragraph (2)) before January 1,
1993, 65 years of age;
``(B) with respect to an individual who attains early
retirement age after December 31, 1992, and before January 1,
2028, 65 years of age plus the number of months in the age
increase factor (as determined under paragraph (3)) for the
calendar year in which such individual attains early retirement
age; and
``(C) with respect to an individual who attains early
retirement age after December 31, 2027, 68 years of age.''.
(b) Conforming Amendment.--Section 216(l)(3) of such Act (42 U.S.C.
416(l)(3)) is amended to read as follows:
``(3) The age increase factor for any individual who attains early
retirement age in the 35-year period consisting of calendar years 1993
through 2027 shall be equal to \1/12\ of the number of months in the
period beginning with January 1993 and ending with the last month of
the calendar year in which the individual attains early retirement
age.''.
(c) Effective Date.--
(1) In general.--The amendments made by this section shall
apply with respect to benefits for months after the date of the
enactment of this Act.
(2) Transition rule.--In any case in which an individual is
entitled to a benefit under title II of the Social Security Act
for the month in which this Act is enacted, the amount of any
benefit of such individual under such title II for any
subsequent month (based on the primary insurance amount of the
individual on whose primary insurance amount such benefit for
the month in which this Act is enacted is based) shall not be
reduced, solely by reason of the amendments made by this
section, below the amount of such benefit for the month in
which this Act is enacted.
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